ESI Return Filing

Employee State Insurance (ESI) registration is a critical requirement for businesses in India, ensuring their employees are covered under the ESI scheme, which provides a range of social security benefits. Following registration, employers are mandated to file ESI returns quarterly, detailing the contributions made towards the scheme for each employee. These returns are crucial for maintaining compliance with the ESIC regulations and ensuring that employees can avail the benefits they are entitled to.

Our experts guide you through every step of ESI registration and the subsequent quarterly return filing, ensuring accuracy, compliance, and peace of mind for employers and employees alike.

Employees' State Insurance (ESI) Scheme

Employees' State Insurance (ESI) is a comprehensive social security program designed to offer financial protection and healthcare benefits to employees in the event of unexpected circumstances. Funded by contributions from both employers and employees, this scheme ensures that insured workers and their families have access to medical services, financial support during illness or maternity, compensation for workplace-related disabilities, and coverage for funeral and confinement expenses. Additionally, in the tragic instance of an employee's death resulting from a work-related injury or illness, ESI provides financial assistance to the bereaved family, reinforcing the system's role in safeguarding employees' socio-economic well-being.

Who should Register for the ESI scheme

The ESI scheme, overseen by the Employees' State Insurance Corporation (ESIC) and regulated by India's Ministry of Labour and Employment, requires contributions from both employers and employees, totaling 4% of an employee's monthly gross salary to the ESI fund. Businesses in India with a workforce of 10 or more are expected to proactively enroll with the ESIC within 15 days of becoming eligible.

Filing ESI Returns

ESI Registered employers are required to submit ESI Returns every sixth month, providing critical information about the employees insured under the scheme, their salaries, and the contributions made by both the employer and the employees. These returns play a key role in verifying the accuracy of contributions to the ESI scheme and ensuring that insured employees are accessing the benefits they're entitled to.

It's mandatory for all employers registered under the ESI scheme to file these returns on time, as any delay or failure to do so can result in penalties and legal actions.

Filing ESI Returns offers several significant benefits for both employers and employees under the Employee State Insurance (ESI) scheme:

Compliance: Timely filing of ESI Returns ensures compliance with the ESI Act, helping employers avoid legal penalties and fines associated with non-compliance.

Record Keeping:It maintains an accurate and official record of all contributions made by and on behalf of the employees, which can be referenced in future audits or clarifications.

Benefit Entitlement:Filing returns is essential for the validation of employees' entitlement to the various benefits under the ESI scheme, such as medical, maternity, disability, and dependent benefits.

Transparency: Regular filing promotes transparency in the financial and administrative aspects of the ESI contributions, enhancing trust between employers and employees.

Ease of Benefit Processing:Accurate and timely filed returns facilitate the smooth processing of claims and benefits for employees, ensuring they receive support when needed without unnecessary delays.

Financial Health: For businesses, regular compliance with ESI regulations through return filing reflects positively on their financial and operational health, building credibility with stakeholders.

Updates and Adjustments:Filing returns allows employers to update or correct any discrepancies in employee details or contribution amounts, keeping the ESI records accurate and current.

Essential Documents for Filing ESI Returns

Essential Documents for Filing ESI Returns

Attendance register,Attendance register,Form 6,Register of wages,Accident register,Cancelled cheque of the company,Inspection book,PAN card of the organisation,Monthly challans and returns for ESI

Penalty Structure for Delayed or Unpaid ESI Contributions

For any non-payment or delays in making contributions, the Corporation has the authority to impose and collect damages according to the Regulations. These damages are set at rates proportionate to the duration of the delay, without exceeding the due contribution amount:

Delay under 2 months: Damages at 5% per annum

Delay between 2 to 4 months: Damages at 10% per annum

Delay between 4 to 6 months:Damages at 15% per annum

Delay over 6 months:Damages at 25% per annum

In cases of non-compliance, the employer may face legal action under Section 85(a) initially, with the possibility of harsher penalties for subsequent violations. The ESI scheme aims to promote workers' welfare, and it is the employer's responsibility to fulfill this objective.

Procedure to File ESI Returns for Employers

Filing an ESI return involves a series of steps that employers need to follow to ensure compliance with the Employee State Insurance Corporation (ESIC) regulations. Here’s a simplified guide on how to file an ESI return:

Registration on ESIC Portal: If not already registered, the employer must first register their establishment on the ESIC portal by obtaining an ESIC registration number.

Login to ESIC Portal: Employers need to log in to the ESIC portal using their 17-digit employer code and password.

Employee Enrollment: Before filing returns, ensure all eligible employees are registered on the portal and their details are updated, including family details for medical benefits.

Download the Return Form: The 'Return of Contributions' form is available for download from the ESIC portal. This form will contain pre-filled information based on the monthly contributions made.

Review Contribution Details: Employers should carefully review the contribution details in the form for each employee, including the total days worked and the amount of wages paid, to ensure accuracy.

Correct Discrepancies if Any:If there are any discrepancies or missing details, correct them before proceeding. Ensure that all employee information and contribution details are accurate and complete.

Submit the Return: After reviewing and ensuring all data is correct, submit the return on the ESIC portal. This process is entirely online, and no physical documents need to be submitted.

Acknowledgment Receipt: Upon successful submission, an acknowledgment receipt will be generated. Employers should save and print this receipt for their records and future reference.

Keep Records: Maintain a copy of the filed returns and acknowledgment receipts for your records and compliance audits.

Regular Updates: Regularly update the ESIC portal with any changes in employee details, salary revisions, or additions and deletions of employees to keep the records up to date for the next return filing.